Ian Malouf’s The Next Generation Pty Ltd (TNG) has challenged the validity of a new regulation that prohibits waste to energy in the Greater Sydney basin. The regulation that was made under the powers of the Protection of the Environment Operations (PE0) Act was gazetted in July. TNG’s case against the NSW government will be heard in the NSW Land and Environment Court on October 18, 2022.
This report by CEM member and journalist Wendy Bacon explains how the case came about and the core issues that will be argued in court. It is hoped that this information will be of use to members of the community, who are affected by or interested in waste to energy proposals, environmentalists and journalists. This post is part of CEM’s broader monitoring, research and reporting on the waste industry in Western Sydney.
Seven years ago, Ian Malouf lodged a State Significant Development Application to operate a large waste to energy facility on a block of land next to a huge landfill and recycling facility that he owned at Eastern Creek. The main waste facility was owned by Malouf’s company Dial-A-Dump Pty Ltd but he formed a separate company The Next Generation ( NSW) Pty Ltd ( TNG) for his waste to energy project.
The waste facility is surrounded by densely settled suburbs. Residents mobilised to fight the proposed incinerator through groups such as No Incinerator for Western Sydney and Western Sydney Direct Action.
The NSW EPA and NSW Health both opposed the application. In 2017, NSW Planning referred Malouf’s application to the Independent Planning Commission (IPC) that refused it on July 9, 2018.
In 2018, Malouf sold his Dial-A-Dump company to another big waste company Bingo Industries. He became a major shareholder and director of Bingo Industries. But he kept the TNG waste to energy site and project proposal out of the deal.
On January 14, 2019, TNG appealed to the NSW Land and Environment Court to overturn the IPC’s refusal and approve the application. That court case has been moving slowly forward since then.
There are three respondents who are opposing the appeal – the Independent Planning Commission that rejected the application, Blacktown Council ( Local Government area) and an objector and local landholder that would be impacted by the waste to energy plant, Jacfin Pty Ltd. Community members have made hundreds of submissions objecting to the waste to energy plant but do not have a right to appear in the case.
Community keeps political fight up against the Incinerator
While the case moves slowly forward, the community kept fighting the proposal. The issue is political as well as environmental. It became clear that if local MPs, whether LNP or Labor, supported the project, their seats could be on the line. This is significant because elections can be won or lost in Western Sydney.
With pressure from some sections of the waste industry to develop clear guidelines for waste to energy proposals, the NSW EPA began to develop a new policy.
NSW Waste to Energy Infrastructure Plan signals no Energy to Waste in the Greater Sydney Basin
The New South Wales government published its Energy from Waste Infrastructure plan on September 10, 2021.
The plan restricted waste to energy incinerator operations to four regional precincts. There were no precincts approved for Greater Sydney. ( You can find a copy of the plan here.)
On the day before the plan was published, the EPA’s Director of Regulatory Policy, Initiatives and Advice Nancy Chang invited Malouf’s legal representatives Mills Oakley to a meeting. According to a later submission prepared for the company, TNG’s legal representatives left the meeting believing that if the government acted on their plan, their project would be prohibited.
TNG lobbies for change
According to documents filed in the Land and Environment Court , TNG’s lawyers tried to avert this outcome by writing to both the then Minister for Planning Rob Stokes and the Treasurer Matt Kean. After they got no response, they wrote to the Premier Dominic Perrottet.
They argued that if the regulation was passed, they should be paid up to $15 million in compensation by the NSW government to cover the costs of their proposal so far. They also argued that if the regulation was to be passed, there should be a ‘savings provision’ to cover their application that was lodged before the regulation was passed.
It is not known whether Perrottet ever replied to Mills Oakley’s letter but in any case, the regulation went ahead as originally planned.
Consultation on Waste to Energy regulation begins – February 1, 2022
A consultation period for a draft waste to energy regulation began on Feb 1, 2022 and ended on March 22, 2022.
Lawyers acting for Malouf’s TNG lodged a submission objecting to the regulation. Their central argument was that the government was proposing to make the regulation under the Protection of Environment Operations (PEO) Act which is “not directed at matters of where proposed development is permissible, or for assessing and approving any proposed development”. Rather, they argued, the PEO act is directed at protecting the environment by controlling pollution through a regime of offences, and environmental licences that control the operation of the development that is approved and permissible, primarily under the NSW Environment Planning and Assessment (EPA) act.
In other words, they were arguing that the government was wrong or had resorted to an “inappropriate use of power” in the way they were making the regulations. Another phrase that is used to describe this is that the regulation would be invalid because it would be ‘ultra vires’ of the PEO Act.
They also argued again that if the regulations were to be passed, there should be a “savings provision” for applications for waste to energy incinerators that had already been submitted. They argued that a savings provision “prevents inherent unfairness to an application that would otherwise flow from the government changing the law after a development application has been lodged”. TNG even submitted a draft saving provision which not only covered its existing State Significant application but also any other waste to energy application on that land for a further ten years.
It is hard to imagine that having received the TNG’s legal objection, which included a warning that TNG would seek compensation, the NSW government did not seek advice from its own lawyers about the validity of the regulation. One would assume the NSW’s Planning lawyers got an ‘all clear’ from their own legal advisors. In any case, after the routine period of consultation, the government went ahead with the draft regulation.
NSW Waste to Energy Regulation gazetted July 2022
The new regulation came into effect on July 8, 2022.
Communities in regional areas were now faced with the prospect that the NSW government favoured waste to energy incinerators in their area. For Sydney communities, the question now was: If energy from waste is prohibited in the Greater Sydney Basin, how would it affect the projects for which applications had already been lodged? Apart from TNG’s proposal, there was also one for an Incinerator at Matraville in Eastern Sydney and another from Cleanway and Macquarie Group at Eastern Creek?
Would the appeal be withdrawn on the grounds the proposal was now prohibited.
In June 2022, NSW Planning conducted a fresh consultation period on an amended proposal from TNG. On June 21, the EPA filed an objection that the proposal was now prohibited by the regulation. Readers of this objection would have known that the regulation was a major new factor in the appeal.
NSW Independent Planning Commission lodges new arguments in appeal case
The Independent Planning Commission (IPC) and the other two respondents to TNG’s appeal – Blacktown Council and Jacfin Pty Ltd – have already lodged lengthy statements about their arguments in the appeal. There are already scores of environmental and other planning issues to be argued in the appeal. But if new arguments arise, updated documents can be lodged. When this happens the other side have the opportunity to respond. This helps fine down the issues before the case begins.
The first party to jump was the IPC. It filed an amended response that stated that the TNG proposal was prohibited by the draft regulation and that it was not covered by any exemptions in the draft regulations ( these are for other forms of incineration, some of them which already exist.) The IPC indicated that its cases would include the argument that according to the new regulation, TNG’s application could not be approved by the Land and Environment because it was prohibited.
Blacktown Council and Jacfin Pty Ltd followed suit and amended their responses in the same way on August 2 and 7 respectively.
By the first week of August, TNG’s lawyers Mills Oakley had decided to challenge the validity of the regulation in separate proceedings. ( These are called Class 4 proceedings.) They filed proceedings on August 8 and finalised their statement of claim on September 18. They are asking the Land and Environment Court to make a declaration that the regulation is invalid.
It was obvious to the lawyers that if TNG is not successful and the Court finds the regulation is valid, that will decide the appeal. If the regulation is valid, it prohibits all proposals in Western Sydney and it would be impossible for the plant to approve something that is not legal. If this happens, and assuming there is no appeal against that decision, the long fight to stop TNG building its giant waste to energy at Eastern Creek is over. The only thing that could change that situation would be a change to the regulation. If TNG is successful in persuading the court that the regulation is invalid , its appeal can continue on all the other legal grounds.
For this reason, all the lawyers agree that the ‘challenge proceedings’ should be expedited. There will be a one day hearing of the legal arguments about the validity or otherwise of the regulation on October 18.
Note on other Greater Sydney Waste to energy proposals
Note: Four applications have been lodged for Waste to Energy in Sydney. In August 2022, NSW Planning formally announced that an application for a Waste to Energy incinerator, otherwise known as the Botany Cogeneration Plant, had been withdrawn. A proposal from Cleanaway and Macquarie also in Western Sydney has not been withdrawn but has not been progressed for two years. TNG also lodged a second proposal for the same site that has not been progressed. This was probably prepared in case the appeal failed on other grounds but would be also be prohibited if the ‘challenge proceedings’ fail.